A startup is choosing between purchasing servers for its data center and moving to a cloud provider that bills monthly for compute and storage. The CFO wants to preserve cash for product development and avoid long-term asset commitments. Which financial outcome does the cloud consumption model provide that the server purchase does not?

The cloud model converts IT infrastructure spend from a capital expenditure to an operating expenditure

The cloud model allows the company to capitalize the monthly fees as an asset

The cloud model eliminates the need for any ongoing operational costs

The cloud model provides a fixed cost that is lower than any on-premises alternative

A large enterprise is negotiating a 3-year enterprise agreement for a suite of developer tools. The vendor offers a significant discount for a fixed license count, but the company's development team size fluctuates due to project-based hiring. The company's procurement lead is concerned about over-licensing during slow periods. Which approach best mitigates the risk of over-licensing while still benefiting from the enterprise agreement?

Accept the fixed license count and rely on the year-end true-down to reduce costs

Negotiate a lower committed license count with a true-up provision for peak periods

Decline the enterprise agreement and purchase all licenses at retail to maintain flexibility

Accept the fixed license count and hire additional developers to utilize the licenses

What is a primary benefit of an enterprise agreement for a large organization?

It allows unlimited use of all products without additional cost

It provides standardized terms and pricing across the organization

It is only available to government agencies

It eliminates the need for any software licensing

Which IT purchasing scenario is classified as a capital expenditure (CapEx)?

Paying for a pay-as-you-go cloud compute service

Purchasing a server with a one-time payment

Paying for a support contract on a quarterly basis

Paying a monthly fee for cloud-based collaboration software

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Domain 2Objective 4

2.4 Explain Different IT Purchasing and Consumption Models 700-805 Practice Questions (Page 1)

Part of the Customer Success domain, which accounts for 10% of the 700-805 exam. Cisco does not publish an official question count, but from its 90-minute exam (~35–60 total, ~4–6 in this domain), expect 1–1 from this objective — we provide 20 practice questions to prepare you well beyond it. (estimate)

20questions here

4free pages

6concepts

10%of the exam

Questions 1–5

1application · medium
A startup is choosing between purchasing servers for its data center and moving to a cloud provider that bills monthly for compute and storage. The CFO wants to preserve cash for product development and avoid long-term asset commitments. Which financial outcome does the cloud consumption model provide that the server purchase does not?
Select an answer first
2expert · hard
A large enterprise is negotiating a 3-year enterprise agreement for a suite of developer tools. The vendor offers a significant discount for a fixed license count, but the company's development team size fluctuates due to project-based hiring. The company's procurement lead is concerned about over-licensing during slow periods. Which approach best mitigates the risk of over-licensing while still benefiting from the enterprise agreement?
Select an answer first
3foundation · easy
What is a primary benefit of an enterprise agreement for a large organization?
Select an answer first
4foundation · easy
Which IT purchasing scenario is classified as a capital expenditure (CapEx)?
Select an answer first
5foundation · easy
Which software license metric is most appropriate for a company that wants to license a product based on the number of individual employees who will access it?
Select an answer first

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2.4 Explain Different IT Purchasing and Consumption Models 700-805 Practice Questions (Page 1)

Questions 1–5

What is a primary benefit of an enterprise agreement for a large organization?

Which IT purchasing scenario is classified as a capital expenditure (CapEx)?

Which software license metric is most appropriate for a company that wants to license a product based on the number of individual employees who will access it?

Keep studying — Customer Success